10-QPeriod: Q1 FY2009

EQUINIX INC Quarterly Report for Q1 Ended Mar 31, 2009

Filed April 29, 2009For Securities:EQIX

Summary

Equinix, Inc. (EQIX) reported its first quarter 2009 financial results, highlighting strong revenue growth and improved profitability. For the three months ended March 31, 2009, total revenues increased by 26% year-over-year to $199.2 million. This growth was driven by a 27% increase in recurring revenues, which now constitute 96% of total revenues. The company experienced robust growth across all geographic segments, with the Asia-Pacific region showing the most significant increase in recurring revenue at 47%. Net income for the quarter was $15.5 million, or $0.40 per diluted share, a substantial improvement from $3.8 million, or $0.10 per diluted share, in the same period of 2008. The company's operational efficiency also improved, with the total cost of revenues as a percentage of revenues decreasing from 60% to 56% year-over-year. Equinix's liquidity position remained strong, with $284.0 million in cash, cash equivalents, and investments as of March 31, 2009, enabling continued investment in expansion projects while meeting operating requirements.

Key Highlights

  • 1Total revenues grew 26% to $199.2 million in Q1 2009 compared to Q1 2008.
  • 2Recurring revenues increased by 27% year-over-year, now representing 96% of total revenues.
  • 3Net income surged to $15.5 million ($0.40 EPS diluted) from $3.8 million ($0.10 EPS diluted) in the prior year quarter.
  • 4Operating income showed significant improvement, rising from $14.0 million to $43.7 million.
  • 5The company's customer base expanded by 20% to 2,384 as of March 31, 2009, compared to March 31, 2008.
  • 6Cost of revenues as a percentage of revenues improved from 60% to 56%, indicating enhanced operational efficiency.
  • 7Liquidity remains strong with $284.0 million in cash, cash equivalents, and investments.

Frequently Asked Questions

Equinix reported a 26% increase in total revenues for the first quarter of 2009, reaching $199.2 million, compared to $158.2 million in the same period of 2008. This growth was primarily driven by a 27% increase in recurring revenues.

Profitability saw a substantial improvement. Net income increased to $15.5 million ($0.40 diluted EPS) from $3.8 million ($0.10 diluted EPS) in the first quarter of 2008. This reflects improved operational performance and revenue growth.

As of March 31, 2009, Equinix maintained a strong liquidity position with $284.0 million in cash, cash equivalents, and investments. The company believes it has sufficient cash and anticipated operating cash flow to meet its operating requirements and fund announced expansion projects for at least the next 12 months.

Equinix is involved in ongoing litigation, including a shareholder class action lawsuit and a lawsuit related to the Pihana Pacific merger. While a settlement for the class action is pending court approval, the outcomes of these legal matters are uncertain and could potentially impact the company's financial condition, though the company believes its claims and alleged damages are without merit.